Hi There,
Just after some advice. We have a IP which we rent out. I have a CBA Viridian Line of Credit loan on this IP.
I understand that I can use the LOC loan to pay for bills such a water rates, council rates that relate to the IP and increase my tax deductible by adding these to the loan.
I currently use the EFT transfer or BillPay facility of the loan to do this. Unfortunately the Com Bank has no credit card facility linked to the Viridian LOC loan.
My question – is it possible to pay the IP bills (such as water and council rates) via a personal credit card and take the exact amount out o the loan to reimburse myself. If it is documented and traceable would this be okay from the ATO's point of view?
Other option may be to apply for a new credit card that is used only for IP bill payments (nothing else) Would either of these scenarios work?
Thanks in advance.
A credit card is a loan. So if you are refinancing the credit card debt with the LOC borrowings the deductibility won't change.
I hope you are not having salary etc deposited into the Viridian?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks for the response Terryw
No, nothing is being deposited into the Viridian instead of the minimal monthly repayment from the rent.
My plan now is to apply for a new credit card that will be used only to pay for the expenses associated with the IP. I will use the LOC to pay this card off completely every month.
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